To Maintain Collections Greater Than 99%
Many actions in the proper order need optimized and team effort maintained. Such actions create a compounding successful outcome. Below is a list of recommended individual actions that collectively will accomplish this, which increases form profits significantly.
The below items are highly influenced in the More Family Law Profits Application. Algorithms to calculate % Collections are generally unknown and not available to law offices. Without a way of calculating % Collections accurately, and then incentivizing staffers to follow the best practices listed below, results will be compromised. The MFLP Application has a proprietary algorithm that calculates % Collections and automated ways for optimizing its use.
If you don’t have software that calculates % Collections accurately, know what is attainable, have high expectations, and have staff highly cooperative through incentives, the outcome will be that significant profits are wasted. A 2% gain in collections for a firm grossing 4,000,000/year is 80,000 a year or a million dollars in 12.5 years. More Family Law Profits can likely increase your % Collections by 2% or more in less than a year.
And that is only a small part
of what MFLP can do for you.
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Phase 1 Steps to achieve 99% Collections (before legal staff begins working for a new client).
#1. The first phone call from a potential client to the family law office business staff is where the best collection practices begin. The caller is seeking help and screening your firm by asking pertinent questions. The business staffer answering the call should be screening the caller to determine her/his potential as a desirable client, including having the resources to pay. By explaining the hourly rates for attorneys, initial retainer amount required and that payments in advance are required, a good screen develops.
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#2. If an Icon appointment is made on the phone, it should be made contingent upon the potential client providing before the appointment: a completed Intake (Application) Form, and a copy of her/his current credit rating.
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#3. A well-designed client Intake (Application) Form is important and asks many things that relate to future collections. Click Here to see such a form and note yellow highlighted content relating to the potential client’s ability to pay. After getting the potential client’s completed intake form and credit rating, assess whether this person would be a good client for your firm and act accordingly, perhaps canceling the appointment.
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#4. Your Retainer Agreement should be named “Retainer and Pay in Advance Agreement” and should include many powerful words that help collections. Click Here to see such a form and note the yellow highlighted content that relates to the potential client’s ability and willingness to pay, and with consequences for paying late. If clients are not required to pay in advance, as their case progresses, and they get what they want, paying your firm becomes their low priority, and you will be earning that money twice by wasting time trying to collect it. Enforcing payments in advance “pays off”.
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#5. If your business is in a slump and a potential client has a poor credit score and low income, what do you do? If the potential client has a Guarantor with a good credit score and ability to pay, have the Guarantor sign a Guarantor Agreement. Click Here to see such a form and note the yellow highlighted relevant content. This is a highly recommended tool and an incredibly safe way to take on more clients without adversely affecting % Collections. Also consider requiring a higher initial retainer amount.
Phase 2 Steps to achieve 99% Collections (after legal staff begins working for a new client).
#6. Inevitably, some clients will get behind and won’t be paying in advance. By then they should know and feel bad about breaking their agreement and be open to a payment plan and signing a Confession of Judgment. Click Here to see such a form and note yellow highlighted content relates to the client’s terms and consequences of not paying.
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#7. ***Emailing Client account statements mid-month and at the end of each month, with finance charges applying each time, highly motivates clients to keep their account current. Click Here to see examples of a mid-month and end month statement. Because the word “statement” may infer an open 30-day account, it is best to call such documents Retainer Status Reports (RSRs) which indirectly reminds the clients not to violate her/his signed Retainer and Pay in Advance Agreement.
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#8. ***On RSRs (aka Statements) with an account balance owed, for example $1,245, an automated note next to the owed amount should say, “Unless your case is completed, please pay $2,245 or more, so your Ending Balance Due will show $1,000 credit, or we will be forced to withdraw as your attorney.”
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#9. ***“TERMS: Pay in Advance” should appear near the top of the RSR.
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#10. ***A note should be on the RSRs below the account balance saying, “TERMS Pay in Advance” means that any balance due is considered past due (delinquent) and a breach of your Retainer and Payments in Advanced Agreement. Any balance due should be paid immediately to ensure continued representation. If you disagree with the balance, please call at once.” and “Finance Charges (.75%) are added to Client accounts at mid-month for balances from the end of the prior month that were not received by mid-month. Additional Finance Charges (another .75%) are added to Client accounts at end of the month for balances from the mid-month that were not received by the end of the month.”
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#11. When clients are behind in their account, collection attempts should include a client charge for the time and effort as covered in the Retainer and Pay in Advance Agreement and subject to a minimum time. When clients agree to be charged for collection attempts and see them on their RSR, they are influenced to pay on time.
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#12. ***Debts Written Off do not affect % Collections. And when doing a “Debt written off” to collect some money, the money gained increases % Collections, so it is wise to discount long overdue balances to get some money and close out the account if you assume that you would likely never get paid otherwise.
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#13. When a client’s payments are long overdue, a threat of taking her/him to small claims court is appropriate. And afterward, if no results, following through should happen. Wasting valuable attorney time in small claims court is not necessary because the Office Manager can do those court appearances.
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#14. Clients typically have one attorney designated to handle their case. Similarly, one paralegal and one business staffer should also be assigned to that case. This team should work together on collection attempts and watching the client account balance, especially when expecting increased billings from upcoming court dates.
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#15. Collections responsibility must fall on the designated attorney because only the attorney can decide when to stop working for a client for whatever reasons. With some clients, Collection Attempts by paralegals and business staff may go ignored. When that happens, a face to face Collection Attempt by the designated attorney or firm owner is advisable. Such collection attempts should include a client charge for the time and effort.
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#16. ***Giving out gift certificate awards monthly that include awards for each staffer for keeping % Collections high, incentivizes staff to do just that. Recognition and friendly competition further motivate staffers.
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#17. ***Performance-based pay for legal staffers that is increased for keeping % Collections high, incentivizes staff to do just that. Recognition and friendly competition further motivates staffers.
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#18. ***Having a client portal online for conveniently making payments 24/7 helps getting paid on time, and it helps % Collections.
***These particular (8) items are easy with built-in features on the MFLP Application.